UW Research

Policies, Procedures and Guidance

GIM 07 – Sponsored Program Subaward Administration

Effective December 26, 2014

Purpose

This GIM sets out the policy and outlines procedures for the administration of subawards issued by the University under a prime agreement (contract, grant or cooperative agreement) awarded to the University.

When the University issues a subaward, it maintains responsibility to the prime sponsor for managing the funds and ensuring performance meets the expectations under the prime agreement. This policy and associated procedures are developed with the intent to manage subaward issuance, set out responsibilities related to administering subawards, and ensure compliance with federal, state and local laws that affect the performance under, and the administration of, subawards. Subrecipient Monitoring policy is covered under GIM 8.

Background

A subaward is a special type of agreement that differs in several respects from those for the more standardized procurement of goods and services from contractors. The distinction between a subrecipient and a contractor is based on the Federal Uniform Guidance, §200.330.

The issuance of a contract to procure goods and services is managed by University Procurement Services whereas a subaward is issued by the Office of Sponsored Programs (OSP).

The prime sponsor’s award to the University usually includes specific authorization for the subaward. Occasionally, the need for a subrecipient’s collaboration develops after an award has been made to the University. Under those circumstances, most sponsor policies require that the University obtain sponsor approval of the subaward before it is entered into by both parties.

Persons/Offices Affected

UW Principal Investigators and Departments, Subrecipients, Office of Sponsored Programs, Payables Administration, and Grant and Contract Accounting.

University Policy

To ensure compliance with the prime sponsor funding, regardless of the sponsored program funding source, the Office of Sponsored Programs (OSP) prepares and administers subawards in accordance with federal policy found in the Federal Uniform Guidance and sponsor policies found in the prime award to the University.

Subawards cannot be issued until the University has received and processed the prime award (e.g. the prime funding is in a “processed” status and has received a budget number) and the subaward request, subrecipient budget, budget justification, scope of work and letter of intent in a format acceptable to OSP is provided through UW Procurement systems.

Subawards may only be issued on behalf of the University by the institutional officials with delegated signature authority within OSP.

Procedures and Guidance

Identification of need and selection of subrecipients

The University Principal Investigator (PI) identifies subrecipient needs for a planned sponsored program. Identification of a subrecipient is primarily based on the expertise, qualifications, availability, cost and technical resources of the subrecipient. Additionally, a UW PI should review new subrecipients against the Excluded Parties List System (EPLS) found in the System for Award Management prior to incorporation of the subrecipient scope of work into the University’s proposal to the originating sponsor.

The factors set out in the federal Uniform Guidance, §200.330 distinguish between a contractor for goods or services and a subrecipient. When deciding whether the collaboration rises to the level of a subrecipient, it is recommended the PI become familiar with these factors and consult with the subaward team in OSP if assistance is needed in determining the need for a subaward versus procurement of goods or services.

As a state institution, the University must justify sole source selection. The PI is responsible for documenting sole source selection justification of the proposed subawardee and maintaining the justification within departmental files.

Preparing a proposal that includes proposed subrecipients

The Office of Sponsored Programs requires that the following subrecipient components be obtained by the UW Principal Investigator (PI) and provided to OSP along with the UW’s prime proposal to a sponsor:

  • Subrecipient’s Scope of Work (SOW): A description of the work to be performed by the subrecipient and a timeline for reports and deliverables.
  • Subrecipient’s budget and budget justification: Includes the subrecipient’s direct and Facilities & Administrative costs (F&A). If the UW’s originating sponsor (prime sponsor to UW) has instituted a published policy that caps F&A rates applicable to the award, the University will in turn flow down the cap to the subrecipient and this should be reflected in the subrecipient’s budget. If the subrecipient does not have a negotiated rate, and in the absence of an F&A rate cap by the originating sponsor, the maximum F&A rate the subrecipient may use is 10% Modified Total Direct Costs (MTDC).
  • A Subrecipient Letter of Intent: Includes the project period, amount and project title of the subrecipient’s proposed scope of work and be signed by the Subrecipient’s institutional official or cognizant officer. A completed PHS398 face page signed by the subrecipient’s institutional official is also acceptable.
  • Any additional elements that may be required by the prime sponsor such as cost or pricing data, the subrecipient’s F&A rate agreement, biosketches and pending support of subrecipient key personnel.

During proposal budget preparation, the amount of the subrecipient’s total costs are included as a separate item in the UW proposed budget as a “consortium/contractual” cost category (object code 03-62 within the University eGC1 and financial system). Per the modified total direct cost (MTDC) base, the first $25,000 of each subaward during the project period is subject to UW’s F&A rate. If the UW’s sponsor is non-federal and does not indicate a base type, UW uses a base type of Total Direct Costs (TDC) and therefore includes the total costs of each subaward in the UW’s base for F&A calculation.

Each proposed subaward must be incorporated and charged to one prime UW project and one UW budget number. Use of shared or split budgets is not allowable.

Small Business Subcontracting Plans

Contracts over a certain total dollar threshold (currently $700,000) awarded by the federal government require a formal Small Business Subcontracting Plan (Plan) outlining anticipated purchases with Small Business Concerns in various categories of spending. Review Procurement Services small business subcontracting plan instructions and worksheet.

All proposed Plans must be consistent with Purchasing policies at the University. All Plans are reviewed by the Procurement Services office at least fourteen (14) business days prior to the federal agency deadline.

OSP will submit the proposal, along with the required Plan, to the sponsor per the deadlines set out in GIM 19.

Questions regarding new or existing Plans and reporting requirements under those Plans should direct their questions to the Small Business Procurement Manager within Procurement Services.

Review Procurement Services small business subcontracting plan instructions and worksheet.

Subaward Issuance

Information and supporting documents required to initiate a subaward

When the prime award is made to the University and accepted by OSP, Grant and Contract Accounting (GCA) assigns a budget number and the PI is notified.

To avoid unnecessary delays, the PI or designated UW Department staff should request the subaward at the time the budget number is issued. All supporting documentation (e.g. current budget, budget justification, letter of commitment or signed PHS398 form, and scope of work of the subrecipient) must be attached to the subaward request.

The subaward team reviews the prime award, subrecipient documentation and prepares the subaward agreement. The subaward team may request additional information from the UW PI and UW Department or the subrecipient PI and subaward entity in order to carry out a risk assessment as described in GIM 8, Subrecipient Monitoring.

Delay in receiving requested information will delay issuance of the subaward.

Issuance of a Subaward

The University is a member of the Federal Demonstration Partnership (FDP), a program to streamline the operations of grants management between U.S. universities and certain federal agencies. Whenever possible, the University uses the Federal Demonstration Partnership (FDP) subaward template to transfer subaward funds to other FDP members.

Per the Uniform Guidance, all federally funded subaward agreements must contain the information required in §200.331(a).

Subawards are typically funded on an annual basis with renewals granted for additional time based on need and availability of prime award funding. Modifications may be made to subawards when circumstances require a change to the terms and conditions. Such modifications may be due to:

  • Change of subawardee personnel
  • Change on subawardee scope of work
  • Provision of supplemental funding or extension of time on the subaward
  • Additional terms or conditions that need to be incorporated into subaward due to changes to prime award terms and conditions

OSP issues the draft subaward agreement to the subrecipient for review and execution. If necessary, terms are satisfactorily negotiated, and the subrecipient returns the partially executed agreement and any required certifications to OSP. OSP then issues the fully executed final award to the subrecipient and copies the UW Department.

Title to equipment under a subaward

When the Subawardee retains title to Equipment

In cases where the U.S. government does not retain title, the Subawardee will retain title to equipment it purchases upon acquisition, subject to the right of the UW to recall equipment with an acquisition cost of $5,000 or more up to 120 calendar days after expiration of the Subaward.

When the Sponsor retains the title to Equipment

When neither the UW nor Subawardee retains the title to equipment acquired through the use of prime sponsor’s funds (normally Federal contracts), the Subaward team will notify the Equipment Inventory Office (EIO) and within 60 days following termination. Review more information:

Closeout of a Subaward

The subawardee must submit a final technical report (in writing unless an exception has been approved) to the UW PI. The PI is responsible for approving the final technical report and retaining it for inclusion in the final technical report to the prime sponsor.

The subawardee must submit a final invoice in accordance with the agreement. The PI/Department is responsible for reviewing and approving the final invoice in the UW Procurement system in a timely manner to assure payment of the invoice from the sponsored program budget number associated with the prime award.

Review more information on subaward closeout.

Responsibilities

Accounts Payable

  • Payment on received and approved subrecipient invoices

Office of Sponsored Programs (OSP)

  • Conduct final review of the prime proposal including making sure an authorized official has signed the subaward proposal, especially to ensure the correct Facilities & Administrative (F&A) cost rate has been used in the request for funding.
  • Issue subaward; negotiate terms
  • Execute and distribute subaward.
  • Coordinate proper subaward closeout, including final technical report, final invoice and close out certification (the latter where necessary).

Principal Investigator

  • Obtain initial proposal documentation including:
    • Presence of all subrecipient proposal materials, including budget, budget justification and letter of commitment or PHS398 signed face
    • Reasonableness of budget in light of the statement of work
    • Small Business Subcontracting Plan, when necessary
  • Include justification for selection of subrecipient within departmental file
  • Ensure timely submission of subawardee invoices
  • Review and approve subaward invoices
  • Monitor the subaward activities, progress, compliance and expenditures. See GIM 8, Subrecipient Monitoring, for specific policy
  • Request subaward modifications when necessary
  • Collect subrecipient closeout materials, including final invention statement, final technical report, final invoice and if applicable review and follow guidance for equipment:
    equipment closeout, Post Award Fiscal Compliance equipment, Equipment Inventory Office.

    Definitions

    Originating sponsor:

    The sponsor to the University of Washington.

    Prime institution:

    Institution which received the sponsored agreement directly from the sponsor.

    Subaward:

    Binding legal contract between UW and another institution or entity regarding completion of part of a sponsored program.

    Subawardee, subrecipient:

    Institution receiving a subaward or subcontract from prime institution.

    Subject

    Resource Link

    Subaward Overview Office of Sponsored Programs: Subawards
    Requesting a Subaward SAGE Subaward Quick Guide
    Managing your purchase orders and invoicing
    Monitoring Budget Numbers MyFinancial Desktop

    Contacts

    Subject

    Contact

    Email

    Phone

    Proposal preparation OSP osp@uw.edu 206-543-4043
    Issuance of subaward OSP Subawards Team ospsubs@uw.edu 206-543-4043
    Procurement of goods or services University Procurement Services pcshelp@uw.edu 206-543-4500

    Content Creator

    Office of Sponsored Programs